Gene Therapy Holds Great Promise, But Big Price

In approving America’s first commercial gene therapy – an extremely expensive, but highly effective treatment for the most common type of childhood cancer – the U.S. Food and Drug Administration (FDA) ushered in a “new frontier in medical innovation,” according to a statement by FDA Commissioner Scott Gottlieb.

But paying for this treatment, and other groundbreaking gene therapies that will follow, requires new models for collaboration among payers, pharma companies, and pharmacy benefit managers like Express Scripts. We are committed to put these medications within reach of the patients who need them.

Dramatically Higher Price

The newly approved drug, KymriahTM (tisagenlecleucel)‎, manufactured by Novartis, brings hope to the 3,100 people under the age of 20 in the United States who are diagnosed each year with acute lymphoblastic leukemia. The medicine is customized for each individual, using genetically modified versions of the patient’s own immune cells to target and kill leukemia cells. The price is $475,000 – lower than the $600,000 to $750,000 that some analysts expected, but still dramatically higher than other specialty drugs.

Gene therapies introduce genetic material into a person’s DNA to replace faulty or missing genetic material that leads to disease. These therapies are administered once, unlike nearly all other medications that are repeatedly taken over time. And therein lies the challenge.

Pharmaceutical companies have a single opportunity per patient to get paid. And many gene therapies target extremely rare diseases, so there aren’t many patients to share the cost drug makers require to justify the expense of research, development and commercialization. The result is very high price tags: the first two commercial gene therapies, approved for use in Europe, cost $1.4 million and $665,000. Despite promising clinical results, one failed and the other is struggling to find a market.

The health care system isn’t set up for this type of economic model.

We Need a New Payment Model

Express Scripts is working with drug makers, policymakers, patient groups and payers on innovative approaches to make gene therapies accessible for patients. Value-based contracting can ensure that payers and patients aren’t on the hook when a treatment isn’t effective. Consultations involving pharma companies and payers can help set appropriate prices. Discussions with policymakers can help set an appropriate regulatory framework.

Ultimately, Express Scripts believes gene therapies will require payment and patient care systems which are as novel as the medications themselves. Ideas on the table include paying for a treatment over time, establishing insurer risk pools and financing one-time payments. A successful model must address patients who change insurers or employers, and tracking their health outcomes over time to ensure payments aren’t being made if the treatment stops being effective.

Putting Medicine Within Reach

The promise of gene therapy is great: Approximately 4,000 diseases are linked to gene disorders, and many lack any effective treatment. More than 1,500 potential treatments are in research and development by dozens of pharmaceutical companies; including nearly 600 targeting cancers and 500 for rare and debilitating or deadly conditions.

As these life-saving and revolutionary treatments continue to be developed, it is up to payers, pharma companies and policymakers to unite and ensure they reach patients. Express Scripts stands ready to do its part.